Univest Financial Corporation · NASDAQ:UVSP
Univest Financial — IPO Roadshow (July 2020)
50 slides from Univest Financial's IPO roadshow presentation, Jul 29, 2020
Slide 1: Investor Presentation July 2020
Investor Presentation July 2020 Issuer Free Writing Prospectus Filed Pursuant to Rule 433 Registration Statement No. 333-221508 July 29, 2020
Slide 2: Safe Harbor Statement
Safe Harbor Statement Cautionary Note Regarding Forward-Looking Statements The information contained in this presentation may contain forward-looking statements. When used or incorporated by reference in disclosure documents, the words “believe,” “anticipate,” “estimate,” “expect,” “project,” “targe
Slide 3: Safe Harbor Statement (cont'd)
Safe Harbor Statement (cont’d) The COVID-19 pandemic has caused significant economic dislocation in the United States as many state and local governments ordered non-essential businesses to close and residents to shelter in place at home. While jurisdictions in which we operate have gradually allowe
Slide 4: Additional Information
Additional Information This presentation contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Management uses these “non-GAAP” measures in its analysis of the Corporation’s performance. M
Slide 5: Preliminary Term Sheet
Issuer Univest Financial Corporation (Nasdaq: UVSP) Security Offered Holding Company Subordinated Debt Due 2030 Security Rating BBB by Kroll Bond Rating Agency Structure Fixed-to-Floating Rate Subordinated Notes Issuance Type SEC Registered Term 10 years Call Date 5 years Use of Proceeds General Cor
Slide 6: Business Overview
BUSINESS OVERVIEW VUNIVEST
Slide 7: Univest Company Overview
Univest Company Overview Headquartered in Souderton, Pennsylvania (Montgomery County) Bank founded in 1876, holding company formed in 1973 Engaged in financial services business, providing full range of banking, insurance and wealth management services Comprehensive financial solutions delivered loc
Slide 8: Market Opportunity
Market Opportunity With BB&T Corporation’s acquisitions of Susquehanna Bancshares and National Penn Bancshares, and WSFS Financial Corporation’s acquisition of Beneficial, Univest is one of the three largest community focused financial institutions remaining headquartered in the Philadelphia market
Slide 9: Univest Primary Physical Service Area
Univest Primary Physical Service Area Twelve counties in Southeastern and Central Pennsylvania and three counties in Southern New Jersey
Slide 10: Univest Financial Center Locations
Univest Financial Center Locations
Slide 11: 2020 Strategy
2020 Strategy 11 Commercial Loan Organic Growth Opportunistic, but disciplined, approach to wealth & insurance acquisitions Continue to take advantage of market dislocation & focus on hiring commercial lenders, including potential team liftouts. - March 2019 – 8 hires, including 5 relationship manag
Slide 12: Executive Leadership Team
Executive Leadership Team ee Jeffrey M. Schweitzer President and CEO, Univest Financial Corporation Michael S. Keim 52 n President, Univest Bank and Trust Co. Brian J. Richardson 37 4 Executive Vice President, ( 8 Megan D. Santana 45 4 y Duane J. Brobst 67 26 Senior Executive Vice President, Chief C
Slide 13: Summary Financial Highlights
SUMMARY FINANCIAL HIGHLIGHTS
Slide 14: 1st Half 2020 Results
1st Half 2020 Results 14 Earnings Loans & Deposits Reported Earnings: $2.9 million $0.10 per share Core Earnings(1): $32.1 million $1.10 per share Reported ROAA: 0.10%/Core ROAA(1): 1.13% Reported ROATE: 1.20%/Core ROATE(2): 13.15% Annualized Loan Growth excl. PPP: 3.0% Includes $89.5 million decrea
Slide 15: COVID-19 Response
COVID-19 Response Under quarantine environment, financial centers operated as drive-through only Vestibule banking utilized at locations without a drive-through Access to safe deposit boxes via appointment 6/22 – six financial centers re-opened 6/29 – re-opened all but one remaining financial center
Slide 16: Core Diluted Earnings Per Share
Core Diluted Earnings Per Share* 16 *Calculated using "Core Net Income Allocated to Common Shares" which is a Non-GAAP measure. Refer to appendix for reconciliation. Note: Graph begins with March 2017, representing first quarter subsequent to Fox Chase Bank acquisition with no transaction related co
Slide 17: Pre-Tax Pre-Provision Income
Pre-Tax Pre-Provision Income* 17 * Non-GAAP Measure – refer to Appendix for reconciliation CAGR = 9.8% 225 bp Fed rate reduction
Slide 18: Tangible Book Value Per Share
Tangible Book Value Per Share* 18 *Calculated using "Tangible Common Equity" which is a Non-GAAP measure. Refer to appendix for reconciliation. (1) Assumes no Wealth Management or Insurance acquisitions. Target 8-10% Annual Growth(1) Benefit of 12/2017 Capital Raise = $1.21
Slide 19: Strong ROAA & ROTE
Strong ROAA & ROTE 19 *Calculated using "Core Net Income" which is a Non-GAAP measure. Refer to appendix for reconciliation. **Calculated using "Core Net Income" and "Average Tangible Common Equity" which are Non-GAAP measures. Refer to appendix for reconciliation. Core ROAA* Core ROTE**
Slide 20: Loan Growth by Segment
Loan Growth by Segment *Includes Fox Chase Bank, which was acquired on July 1, 2016 CAGR = 9.2% Loan Detail - $ in thousands (excl. PPP) $3.1B $3.2B $3.3B $3.3B $3.5B $3.5B $3.6B $3.7B $3.8B $3.9B $4.0B $4.1B $4.2B $4.3B $4.4B $4.5B $4.5B
Slide 21: Deposit Growth by Segment
Deposit Growth by Segment *Includes Fox Chase Bank, which was acquired on July 1, 2016 CAGR = 11.8% Deposit Detail - $ in thousands $3.1B $3.2B $3.3B $3.4B $3.3B $3.5B $3.5B $3.5B $3.6B $3.8B $3.9B $4.0B $4.1B $4.3B $4.4B $4.4B $4.9B
Slide 22: Net Interest Income (Asset Sensitive)
22 Net Interest Income (Asset Sensitive) *Proforma tax equivalent margin calculation excludes purchase accounting accretion and is based upon a proforma 21% tax rate for all periods presented Calculated using “Core Net Interest Income excluding PPP” which is a Non-GAAP measure. Refer to appendix for
Slide 23: Efficiency Ratios
23 Efficiency Ratios UVSP pays a Bank Share Tax rather than Bank Income Tax to the Commonwealth of Pennsylvania as a result of our type of charter. This amount is included in noninterest expense and increases our efficiency ratio by approximately 170 bps compared to other banks that do not have this
Slide 24: Revenue
Revenue Revenue Revenue by Business Unit (year-to-date 6/30/20) *2020 is an annualized figure – (Q1+Q2). Excludes PPP Loan impact Revenue = Net Interest Income + Non-Interest Income
Slide 25: Assets
Assets Chart data as of December 31 except for 2020 (6/30). 2020 excluding PPP Loans = $5.6B $4.2B $4.6B $5.0B $5.4B $6.1B
Slide 26: Liabilities and Deposits
Liabilities and Deposits Chart data as of December 31 except for 2020 (6/30) Liabilities Deposits
Slide 27: Stable Asset Quality
Stable Asset Quality Nonperforming Assets Nonaccrual Loans and Leases Chart data as of December 31 except for 2020 (6/30) Note: 2020 includes a $2.7 million charge off related to a $8.1 million loan that was transferred to OREO during Q2 2020. Valuation based on a letter of intent to sell the proper
Slide 28: Current Expected Credit Loss (CECL) Implementation
Current Expected Credit Loss (CECL) Implementation On January 1, 2020, the Corporation adopted Accounting Standard Update No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“CECL”). Upon adoption, the Corporation recognized: $12.9
Slide 29: Liquidity and Capital
LIQUIDITY AND CAPITAL VUNIVEST
Slide 30: Liquidity and Capital
Liquidity and Capital 30 Liabilities & Shareholders’ Equity Borrowing Sources – as of 6/30/20 Wholesale Term Funding Maturities – as of 6/30/20 All data in millions, as of 6/30/20 * $182.5M from Fed related to PPP * Uncommitted lines ranging from $15M to $125M
Slide 31: Strong Capital Ratios Provide for Operating Flexibility
31 Strong Capital Ratios Provide for Operating Flexibility Univest Financial Corporation (Parent) Univest Bank & Trust Co. (Bank) Cash Position of $73.0M at 6/30/20
Slide 32: Largest Deposit Relationships
Largest Deposit Relationships – As of 6/30/2020
Slide 33: Investments
Investments ($398 Million at 6/30/20) Investment Portfolio at 6/30/20 Investment Portfolio Details
Slide 34: Loan Portfolio Detail and Credit Overview
LOAN PORTFOLIO DETAIL AND CREDIT OVERVIEW
Slide 35: Loans
Loans ($4.5 Billion at 6/30/20 excluding PPP) Loan & Lease Detail at 6/30/2020 (excluding PPP) CRE Portfolio at 6/30/2020 Excludes PPP Loans
Slide 36: Largest Loan Exposures
Largest Loan Exposures – As of 6/30/20
Slide 37: Loan Portfolio Overview
37 Loan Portfolio Overview – As of 6/30/20
Slide 38: Credit Infrastructure
Credit Infrastructure Experienced credit team Conservative credit culture Centralized credit approval process Low levels of authority in the field Rigorous underwriting and disciplined committee approval required Approval Process Risk Management Process Owns Borrower Relationship Business/Industry E
Slide 39: Credit Authority and Risk Management
Limited single signature lending authority. Joint signature up to $5.0 MM, then management level loan committee for the largest exposures. Itemized report of all approvals to weekly Officer Loan Committee. Robust independent loan review process. Quarterly review cycle. Credit Officer involvement in
Slide 40: Business Unit Overview
BUSINESS UNIT OVERVIEW VUNIVEST
Slide 41: Commercial Banking
Commercial Banking 90 lenders, relationship managers and portfolio managers operating in two divisions established by geography (serving clients primarily in Pennsylvania, New Jersey, Delaware and Maryland) East Penn and New Jersey: Bucks, Montgomery, Chester, Delaware, Berks, Philadelphia, Lehigh a
Slide 42: Consumer Banking
Consumer Banking 39 financial service centers located in Bucks, Chester, Lancaster, Lehigh, Montgomery, Northampton and Philadelphia counties in PA and Ocean City, NJ; also operating 14 retirement centers in Bucks and Montgomery counties Proactively addressed continued reduction in transactional vol
Slide 43: Mortgage Banking
Mortgage Banking 34 Home Loan Consultants operating in Bank’s core footprint Centralized processing, closing and underwriting Primarily agency lender: FNMA, FHLMC, FHA, VA and USDA FNMA and FHLMC eligible loans sold servicing retained Received approval as a GNMA issuer in 2018 FHA, VA and USDA loans
Slide 44: Univest Capital, Inc.
Univest Capital, Inc. Equipment financing business with $154 million in lease receivables as of 6/30/20 Average lease size $42,000, typically with four year term Primary industries served: health care, education/office, automotive, golf/turf, technology and energy Manage residual risk by primarily u
Slide 45: Wealth Management
Wealth Management Comprehensive wealth management platform including broker / dealer, municipal pension services, registered investment advisor, retirement plan services and trust Effective 1/1/19, the wealth management division was rebranded as Girard (i.e. Girard Advisory Services, LLC, Girard Ben
Slide 46: Insurance
Insurance Independent insurance agency with more than 60 carrier relationships Full service agency providing commercial and personal lines, employee benefits and HR consulting solutions Built via a series of eight acquisitions beginning in 2000. Last acquisition was Sterner Insurance in 2014, provid
Slide 47: Appendix (Non-GAAP Reconciliations)
APPENDIX (Non-GAAP Reconciliations)
Slide 48: Appendix – Non-GAAP Reconciliations
48 Appendix – Non-GAAP Reconciliations (1) Amount does not include servicing rights This presentation includes financial information determined by methods other than in accordance with U.S. generally accepted accounting principles (“GAAP”). The management of Univest Financial Corporation uses these
Slide 49: Appendix – Non-GAAP Reconciliations (cont.)
49 Appendix – Non-GAAP Reconciliations (cont.) *Based upon a proforma 21% tax rate for all periods presented.
Slide 50: Univest: Banking | Insurance | Investments
VUNIVEST BANKING | INSURANCE | INVESTMENTS